![\"Pic](\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Pic-12.jpg\")
<\/p>\nThe story of Airbnb starts like that of many other successful startups. Two young, broke urbanites look for creative ways to save a little money. Brian Chesky and Joe Gebbia moved to San Francisco in October 2007, and realized they needed a little help paying their rent. During the Industrial Design Conference, they hosted three visitors who did not want to pay for inflated hotel prices, by offering an air mattress and\u00a0a home-cooked breakfast in the morning to each guest.<\/p>\n
<\/p>\n
Original lodging space for one guest in duo\u2019s San Francisco loft<\/em><\/p>\n First Airbnb guest, Amol, enjoys hospitality and accommodation for just $80<\/em><\/p>\n A lightbulb goes off. How could they scale this? They immediately brought in their ex-roommate and engineering whiz, Nathan Blecharczyk, and established Airbnb.com in the summer of 2008. Today, the company is valued at over $24B and has had over 11 million travelers enjoy stays all over the world.<\/p>\n BUSINESS MODEL:<\/strong><\/p>\n Airbnb is an online marketplace that provides unique\u00a0value to two\u00a0sets of users:<\/p>\n For Hosts:<\/p>\n For Travelers:<\/p>\n For Both:<\/p>\n The company earns revenue from two different sources: They charge commission to hosts at 10% of every booking. And they\u00a0charge a 3% \u201ctransaction fee\u201d to travelers for every confirmed booking. Through these two channels, Airbnb projects $900M in revenue for 2015. The brilliance of their strategy is how they have managed to successfully provide the above values to travelers and hosts while monetizing this with a lean operating model that offloads the risks and intensive capital requirements of actually owning physical properties.<\/p>\n OPERATING MODEL:<\/strong><\/p>\n Airbnb\u2019s greatest competitive edge within\u00a0its operating model lies in its people. The three founders understand the need to keep its operations simple while offloading as much risk as possible. They have also established an innovative, adaptive culture within the company, where responding to user needs is of the utmost importance. Furthermore, the three founders complement each other in skillset:<\/p>\n Joe Gebbia was an entrepreneur from an early age and acts as the \u201cface of the company.\u201d He is responsible for crafting the company\u2019s culture and identifying future growth opportunities. He is charismatic, inspiring, and often speaks\u00a0at high-profile tech events to establish Airbnb\u2019s position as an industry leader and disruptor.<\/strong><\/p>\n Brian Chesky is responsible for setting the company\u2019s vision and acts as the chief strategist. He identifies innovative ways to grow Airbnb\u2019s business and looks for genuine ways to positively impact the lives of users and the communities they serve. He is also responsible for the design and look, and makes sure the interface of Airbnb.com reflects the company\u2019s personality.<\/strong><\/p>\n Nathan Blecharczyk is the CTO of the company. He is responsible for building a team of world-class engineers that keeps the website running smoothly, and ensures it is nimble enough to quickly react to customer needs\/industry trends. <\/strong><\/p>\n All three are gifted leaders who know how to mobilize and inspire a team. They are also well-entrenched\u00a0within the tech world and have deep connections to investors with just as deep pockets. Their networks in the Silicon Valley investor community have allowed them to easily secure multiple rounds of generous funding. This, in turn, have allowed them to operate freely, without external pressures to deliver short-term profits. The founders, as a result, are primarily\u00a0committed to delivering unique, first-class value to users and investing in the best talent to grow\u00a0their business.<\/p>\n \u00a0 The total\u00a0disclosed amount of funding that Airbnb has secured easily trumps that of many other successful peers. The access to this type of funding has been critical in growing Airbnb\u2019s business without external pressure to focus on pure profits<\/em><\/p>\n Another key to Airbnb\u2019s success is the management team\u2019s focus on nimble, adaptable technology that quickly reacts to users\u2019 needs. The company quickly added details to the webpage such as user reviews when trust became an evident issue between traveler and renter. In extreme cases, travelers have burnt down their host\u2019s home after a wild party, and one user even created a fake identity to rent out a home to set up a meth lab. In reaction to these horror stories, Airbnb quickly changed user\/host profiles to include detailed reviews of each user. In 2008, they offered information on social connections (via Facebook) to build up trust between the two parties.<\/p>\n Later on, they received user feedback that photos, house rules, list of amenities, and information about the neighborhood would be extremely useful in the decision making process, so they quickly appended these features to their website.<\/p>\n To keep up with mobile usage trends, they also offered a mobile app for iOS and Android users. By 2012, over a quarter of the company\u2019s traffic came from mobile usage and the app had been downloaded over 1 million times.<\/p>\n We have explored how Airbnb\u2019s business model of delivering unique value to two sets of customers is supported by their\u00a0customer service-obsessed strategy and technology-driven team of engineers that quickly adapt to user needs. This complementary\u00a0system will continue to provide Airbnb access to unique\u00a0growth channels and we can expect to see more great things from them in the future.<\/p>\n Sources:<\/strong><\/p>\n http:\/\/fortune.com\/2014\/11\/24\/uber-airbnb-sharing-economy-fallacy\/<\/a><\/p>\n http:\/\/techcrunch.com\/gallery\/a-brief-history-of-airbnb\/<\/a><\/p>\n http:\/\/nextjuggernaut.com\/blog\/airbnb-business-model-canvas-how-airbnb-works-revenue-insights\/<\/a><\/p>\n http:\/\/www.wsj.com\/articles\/the-secret-math-of-airbnbs-24-billion-valuation-1434568517<\/a><\/p>\n![\"pic](\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/pic-2.jpg\")
<\/a><\/p>\n\n
\n
\n
<\/p>\n<\/strong><\/p>\n